EU ruling against Belgian corporate tax breaks may set precedent for decision on Apple

The European Commission on Monday ruled that Belgium broke state aid rules by offering tax breaks to a number of multinational corporations, 35 of which will have to repay $765 million.

Belgium's practices hurt competition by "putting smaller competitors who are not multinational on an unequal footing," according to the Commission's competition policy head, Margrethe Vestager.

"There are many legal ways for EU countries to subsidise investment and many good reasons to invest in the EU," she added in her statement. "However, if a country gives certain multinationals illegal tax benefits that allow them to avoid paying taxes on the majority of their actual profits, it seriously harms fair competition in the EU, ultimately at the expense of EU citizens."

The names of the 35 multinationals have yet to be revealed, but may be published later on.

The Commission has been cracking down on several member states, such as Luxembourg and the Netherlands, accused of offering special breaks in order to attract multinationals. Companies that exploited the deals have included the likes of Amazon, Fiat Chrysler, and Starbucks.

The most infamous example however may be Apple, which has funneled much of its non-U.S. revenue through Ireland, exploiting loopholes to pay just 2.5 percent in taxes instead of 12.5. The country is already working to close some of the loopholes, but the Commission is nevertheless continuing with an investigation that could penalize both Apple and the Irish government.

Apple has repeatedly insisted that it simply follows the law and pays everything it owes, but today's ruling could set a precedent that makes it less likely it will escape judgement.

23 Comments

metrix 256 comments · 15 Years

About 8 years ago

Apple should just look at this as the cost of doing business in Europe and raise prices to recoup this retroactive taxing.

radarthekat 3902 comments · 12 Years

Seems like Belgium should pay that money to the EU. After all, they are the ones who promised tax breaks to multinationals. Had they not, then the companies' might have made different plans, so Belgium should be held accountable for promises it made.

Okay, back to reality...

Apple will be named among the list of 35 companies. The fines will be as follows: Apple: $764,999,966, each of the 34 other companies: $1 Justice is served. /s

boltsfan17 2294 comments · 12 Years

Forcing a sovereign nation to recover taxes from companies who followed all tax laws will not end well for the EU. I guarantee you within the next few years, all the EU countries will be at each others throats. It's not going to be pretty when Europe's leaders learn once again that centralized planning does not work.

ppietra 288 comments · 14 Years

metrix said:

Apple should just look at this as the cost of doing business in Europe and raise prices to recoup this retroactive taxing.

How is that? It’s about taxes over profits, with some companies not paying the same as others, which can be viewed as unfair competition, so what you say doesn’t make much sense. Ironically corporate taxes in the US are higher than in most EU countries, so according to you Apple should raise prices in the US

SpamSandwich 32917 comments · 19 Years

boltsfan17 said:

Forcing a sovereign nation to recover taxes from companies who followed all tax laws will not end well for the EU. I guarantee you within the next few years, all the EU countries will be at each others throats. It's not going to be pretty when Europe's leaders learn once again that centralized planning does not work.

Not only that, when the overseas tax repatriation law goes flying through Congress with the new president (yes, I'm predicting a narrow Trump win) the EU will see massive losses of companies and revenue. They'll have to uniformly lower their taxes on businesses or feel some major pain.